DRILL CORE grading 37 per cent copper and 8.5 gold grams per tonne, drilled in August this year under Reservoir Minerals’ joint-venture with copper giant Freeport in Serbia. 

DRILL CORE grading 37 per cent copper and 8.5 gold grams per tonne, drilled in August this year under Reservoir Minerals’ joint-venture with copper giant Freeport in Serbia. 

Reservoir Drills 23% Copper Equivalent over 60m in Serbia

Issue 67, December 2013

Reservoir Minerals has continued a blockbuster set of drill results from its Timok project in Serbia, drilling 166m at 11.3 per cent copper equivalent.

Copper graded 6.7 per cent, with gold clocking in at 7.8 grams per tonne. Over one interval of 60m, copper equivalent averaged over 23 per cent, lifted by gold grades of over 15 grams per tonne.

Either on the gold or copper alone, the results are extraordinary, lifting shares by 15 per cent on the week, on top of a 10-fold increase in the last 18 months. “You never get used to drill results like this,” one director told Global Mining Observer this week.

Investors in Reservoir widely expect a takeover offer from joint-venture partner Freeport-McMoRan, the world’s biggest copper miner behind Chile’s state-owned Codelco. In exchange for a 55 to 75 per cent project share, Freeport currently carries 100 per cent of Timok’s pre-construction costs.

Reportedly to avoid overspend under the joint-venture ahead of the year end, Freeport recently lowered its rig count at Timok, with one hole currently being drilled.

“We are waiting for the end game,” one institutional holder has advised its clients, “however long that might take.” Sprott’s Rick Rule meanwhile cited the company as an example of a market that is not universally downtrodden in a speech in London this week.

In large part backed by Rule, Reservoir was founded and is chaired by Miles Thompson, who also chairs Brazil and Peru focused Lara Exploration. Both companies employ joint-ventures to carry the high cost of drilling, leveraging their dollars raised to dollars put in the ground. Under a partnership with London-listed Antofagasta, Lara is due to shortly begin drilling the Sami gold-copper project, Peru.

With corporate tax rates of 15 per cent and no restrictions on foreign ownership, Reservoir’s Timok discovery has turned Serbia into an increasingly fashionable mining address. At roughly $0.07 per kilowatt hour, power costs are as low as Peru and 40 per cent below typical rates in Chile.

“The obvious thing is [for Freeport] just to take the whole thing,” one of Reservoir’s largest shareholders says of Timok, “but big companies seem more willing to pay up for certainty than to steal things when they’re cheap.”

“You never get used to drill results like this.”

RELATED NEWS

Reservoir Minerals:
Rigs Turning
at Timok

Every step-out adds around 300m tonnes to the deposit's vast mineralisation

............................................

Rick Rule:
'Free is a Very
Good Price'

Prodigious investor Rick Rule buys his lottery tickets with
other people's money

............................................

Altius Flies Higher
on Coal & Potash
Royalty Deal

$1bn deal by Sherritt accelerates Altius' evolution into leading royalty group

............................................

............................................

Bold Gold Deals
Move Increasingly
Into the Money

Klondex, Franco & Silver
Standard all move to capitalise
on bullion's cycle

Lara Exploration
Deepens Ties to
Antofagasta

Miles Thompson's expanding asset base in Brazil, Peru and Colombia